Paxos categorically disagrees with the SEC that BUSD is a security
The United States Securities and Exchange Commission (SEC) has defined the stablecoin Binance USD (BUSD) as a security in a Wells Notice sent to its issuer, Paxos Trust Company. The SEC alleges the organization failed to register BUSD under federal securities laws. The firm, however, categorically disagrees with the authority’s view, and it’s prepared to vigorously litigate the matter in the U.S. courts. Also this week, Paxos was given directions from the New York Department of Financial Services to halt the issuance of new BUSD tokens. The department allegedly received a complaint last year from Circle another stablecoin issuer claiming that Binance’s reserves were insufficient to back BUSD.
SEC sues Do Kwon and Terraform Labs for fraud
The U.S. SEC has also filed a lawsuit against Terraform Labs and its founder Do Kwon for allegedly orchestrating a multi-billion dollar crypto asset securities fraud. The regulator said Kwon and Terraform offered and sold an inter-connected suite of crypto asset securities, many in unregistered transactions. It pointed to the firms now-collapsed algorithmic stablecoin, TerraClassicUSD (USTC) and its connected cryptocurrency Terra Classic (LUNC). The complaint seeks charges for violations of registration and anti-fraud provisions of securities laws.